UK Governance: From Overloading to Freeloading

The UK's ongoing political turbulence has prompted a reprise of debates from the 1970s when many concluded the country was ungovernable. Then, the most influential diagnosis conceptualised the UK's governance problem as one of ‘overloading’ caused by the electorate's excessive expectations. This article argues that these accounts overlooked another phenomenon besieging UK governance during this period. This phenomenon was freeloading: the withering of government capacity deriving from the ability of actors to enjoy the benefits of citizenship without altogether contributing to the cost. In the interim, these problems have become endemic, not least because of the unspoken but discernible policy of successive governments to turn the UK into a tax haven. High‐profile scandals involving prominent individuals and corporations, plus the failure to clamp down on them have reinforced the perception that the UK's political system is geared towards the rich and the powerful at the expense of the marginalised majority.     

Fiscal consolidation under electoral risk

The European debt crisis has uncovered serious tension between democratic politics and market pressure in contemporary democracies. This tension arises when governments implement unpopular fiscal consolidation packages in order to raise their macroeconomic credibility among financial investors. Nonetheless, the dominant view in current research is that governments should not find it difficult to balance demands from voters and investors because the economic and political costs of fiscal consolidations are low. This would leave governments with sufficient room to promote fiscal consolidation according to their ideological agenda. This article re‐examines this proposition by studying how the risk of governments to be replaced in office affects the probability and timing of fiscal consolidation policies. The results show that governments associate significant electoral risk with consolidations because electorally vulnerable governments strategically avoid consolidations towards the end of the legislative term in order to minimise electoral punishment. Specifically, the predicted probability of consolidation decreases from 40 per cent after an election to 13 per cent towards the end of the term when the government's margin of victory is small. When the electoral margin is large, the probability of consolidation is roughly stable at around 35 per cent. Electoral concerns are the most important political determinant of consolidations, leaving only a minor role for ideological concerns. Governments, hence, find it more difficult to reconcile political and economic pressures on fiscal policy than previous, influential research implies. The results suggest that existing studies under‐estimate the electoral risk associated with consolidations because they ignore the strategic behaviour that is established in this analysis.     

Making Sense of Greek Austerity

The process of approving a Greek drawing on funds provided by the international community is now familiar. There is concern about the prospect of securing an agreement between the International Monetary Fund (IMF), the European Union (EU), the European Central Bank (ECB), and Greece, which satisfies all parties. This paper suggests that all parties to the agreement have interests in an orderly resolution of the Greek crisis that keeps Greece in the Eurozone. Furthermore, it argues that disagreements and delay before eleventh‐hour agreements can best be explained politically. The paper first demonstrates how Greece, the IMF, and the EU each have a clear interest in finding an orderly solution to the Greek crisis that allows it to remain in the Eurozone. It then outlines the incremental nature of the package and its strategic benefit both for the European banking sector, and governments in Greece and the Eurozone more broadly.     

Crisis for the State or Crisis of the State?

The Conservative‐Liberal Democrat government's policy risks turning the financial crisis into a crisis of the state. This article argues that the current trajectory of the British state risks exacerbating the very social antagonisms which it has fought so hard to contain in recent years. It contends that the crisis (2007–09) was a crisis of neoliberalism and yet, paradoxically, neoliberalism—in the form of further depoliticisation and a new politics of debt—is being re‐invoked to deal with the post‐apocalyptic condition of the British economy. The article suggests that the state lacks the necessary political discourse to secure popular consent and—as a result—is resorting to a more coercive form of political management; and that the effects of austerity are being offset through an increased indebtedness of the British public. Both risk igniting social conflict. In the conclusion several points are indicated for an alternative political agenda.     

Mobilizing for a ‘Europe from below’: network,territory, and place in the anti-austerity Blockupy movement

In March 2015, the anti-austerity movement, Blockupy, protested the inauguration of the ECB's new premises. This article explores Blockupy's construction of a sociospatial imaginary of a ‘Europe from below’. The article: (1) analyses the construction of the transnational Blockupy network, (2) compares the territory of the elite's austerity Eurozone with that of a different ‘Europe from below’, and (3) shows how the ECB premises have been the central place of European austerity and protest. This approach supplements recent debates on multispatiality, and shifts the lens used to analyse crises from a structural one to one emphasizing ongoing politicization ‘from below’.     

Do citizens care about government debt? Evidence from survey experiments on budgetary priorities

Ever since the Great Recession, public debt has become politicised. Some research suggests that citizens are fiscally conservative, while other research shows that they punish governments for implementing fiscal consolidation. This begs the question of whether and how much citizens care about debt. We argue that debt is not a priority for citizens because reducing it involves spending and tax trade-offs. Using a split-sample experiment and a conjoint experiment in four European countries, we show that fiscal consolidation at the cost of spending cuts or taxes hikes is less popular than commonly assumed. Revenue-based consolidation is especially unpopular, but expenditure-based consolidation is also contested. Moreover, the public has clear fiscal policy priorities: People do not favour lower debt and taxes, but they support higher progressive taxes to pay for more government spending. The article furthers our understanding of public opinion on fiscal policies and the likely political consequences of austerity.     

Federal dynamics in times of economic and financial crisis

The global economic and financial crisis is a challenge for all governments, but particularly for federal states because divided and/or shared territorial powers make federations susceptible to coordination problems in fiscal policy making. This article explores the effects of the ongoing crisis on federal relations. Three kinds of problems that may become the cause of federal tensions and conflicts are evoked: opportunism of subgovernments, centralisation and erosion of solidarity among members of the federation. Our analysis of fiscal policies and federal conflicts of 11 federations between 2007 and the present reveals three kinds of coordination problems: shirking in the use of federal government grants, rent‐seeking in equalisation payments, and over‐borrowing and over‐spending. Our results show that shirking remained limited to few cases and occurred only in the first part of the crisis. However, rent‐seeking and over‐borrowing and over‐spending led to a reduction of solidarity among subgovernments and to increased regulation of the fiscal discretion of the members of the federation. Subsequently, tensions in federal relations increased – although only in one case did this challenged the federal order.     

Devine intervention? Lessons in systemic retrenchment from Canada’s most generous welfare state

This article tackles the importance of systemic retrenchment in welfare state research by focusing on two core elements neglected in the literature: the civil service and governmental revenues. Saskatchewan has possessed key ingredients associated with generous welfare states: a dominant left-wing party, a supportive bureaucracy and important non-visible fiscal revenues. According to the comparative welfare state literature, this is also an excellent recipe for maintaining a generous welfare state amid attempts, primarily by right-wing governments, to scale it back. Yet, most social indicators in the post-Devine years demonstrate that Saskatchewan can no longer be considered a leading welfare state in Canada. Reforms to the bureaucracy and a host of financial measures resulting in a near default explain why the Devine government was successful in its efforts to disrupt the CCF/NDP social legacy despite the fact that the NDP regained power for 16 years afterwards.     

Austerity's Wasted Years

Austerity has become the norm of economic management in the EU, Britain and the USA. In each it is offered as the answer to different problems but everywhere the result is cuts in public spending, higher unemployment and low growth, none of which helps recovery from recession. Labour's response should not be to endorse or continue austerity but to initiate a Keynesian expansionary stimulus based on borrowing and spending on a huge programme of building public housing for rent. This should be accompanied by a competitive exchange rate, an industrial policy to boost the manufacturing sector and a National Investment Bank, the aim being to expand the production base so that it can pay the nation's way in the World and support the structure and the improvements Labour needs. This makes the choice at the next election the issue of what kind of Britain the electorate wants to see: a low wage, mean economy or a determined attempt to rebuild a stronger nation with a more powerful economy.     

The European Commission and fiscal governance reform: a strategic actor?

The intensification of the financial and economic crisis in Europe has added a new impetus to the debate over the possibilities for securing supranational fiscal integration within the Economic and Monetary Union (EMU). Since the literature on the European Union’s response to the crisis is dominated by the study of intergovernmental politics, this article considers the previously neglected role of the Commission. A framing analysis of the Commission’s crisis discourse is operationalised here, which is supplemented by interviews with senior officials located in the Directorate General for Economic and Financial Affairs (DG ECFIN) during key phases of the crisis. It is found that a supranational reform agenda was never internalised by the Commission. Instead, the Commission acted strategically by framing the crisis around intergovernmental fiscal discipline. These findings suggest that, in line with the ‘new intergovernmentalist’ thesis, supranational institutions themselves may not be as ‘hard-wired’ towards supranationalism as is often assumed.     

The politics of external approval: Explaining the IMF's evaluation of austerity programmes

During the European debt crisis, numerous states launched austerity programmes. The International Monetary Fund (IMF) evaluates and forecasts the likelihood of member states’ success in implementing these programmes. Although IMF evaluations influence country risk perceptions on capital markets, little is known about their reasoning. This article uses fuzzy‐set qualitative comparative analysis (fsQCA) to explore on what grounds the IMF evaluated the success prospects of austerity programmes during the European debt crisis. Results reveal that IMF evaluations are heavily influenced by the programme's implementation credibility. They require a tractable policy problem, a country's institutional capacity to structure implementation, and favour expenditure reduction over revenue measures. By acting as a strict guide on the road to fiscal adjustment, the IMF indirectly influences member states’ scope of policy making through its surveillance activities. Extensive austerity programmes that need to be implemented swiftly are evaluated negatively if the country is not involved in an IMF programme.     

‘Going beyond the Troika’: Power and discourse in Portuguese austerity politics

This article analyses the margin of manoeuvre of Portuguese executives after the onset of the sovereign debt crisis in 2010–2015. To obtain a full understanding of what happened behind the closed doors of international meetings, different types of data are triangulated: face‐to‐face interviews; investigations by journalists; and International Monetary Fund and European Union official documents. The findings are compared to the public discourse of Prime Ministers José Sócrates and Pedro Passos‐Coelho. It is shown that while the sovereign debt crisis and the bail‐out limited the executive's autonomy, they also made them stronger in relation to other domestic actors. The perceived need for ‘credibility’ in order to avoid a ‘negative’ reaction from the markets – later associated with the conditions of the bail‐out – concurrently gave the executives a legitimate justification to concentrate power in their hands and a strong argument to counter the opponents of their proposed reforms. Consequently, when Portuguese ministers favoured policies that were in congruence with those supported by international actors, they were able to use the crisis to advance their own agenda. Disagreement with Troika representatives implied the start of a negotiation process between the ministers and international lenders, the final outcome of which depended on the actors’ bargaining powers. These strategies, it is argued, constitute a tactic of depoliticisation in which both the material constraints and the discourse used to frame them are employed to construct imperatives around a narrow selection of policy alternatives.     

Signposts to the 2020s

Unless Labour in tandem with other parties of the parliamentary left offers a modernised Keynesian alternative to the neoliberal economic policies of austerity embraced across Europe, there is no prospect of winning again or defeating the right‐wing populism eating into our voter base.     

Learning-Shaping Crises: A Longitudinal Comparison of Public Personnel Reforms in Italy, 1992‒2014

Abstract

This article analyses the attempts to reform public administration, notably personnel management, in Italy between 1992 and 2014, with a focus on implementation and the period following the multiple crises that have unfolded since 2008. By untangling the policy learning processes between multiple crises, past reform attempts and domestic and European “contexts in motion”, the article finds that efficiency-oriented reforms have floundered regardless of the political color of governments or indeed of the nature – political or technocratic – of the governments. Domestic factors, notably the frequency of government alternation, i.e. government instability, and European pressure have further reinforced the orientation towards single-loop lessons, i.e. the almost exclusive effecting of short-term cost-cutting measures.     

Does fiscal pressure constrain policy responsiveness? Evidence from Germany

Political responsiveness is highly unequal along class lines, which has triggered a lively debate about potential causes of this political inequality. What has remained largely unexplored in this debate are the structural economic conditions under which policymakers operate. In this contribution, we hypothesize that budgetary pressures affect both the level and the equality of political responsiveness. Using a dataset containing public opinion data on around 450 fiscal policy proposals in Germany between 1980 and 2016, we investigate whether policymakers are more responsive on issues with budgetary consequences under conditions of low fiscal pressure than under conditions of high fiscal pressure. We find that responsiveness indeed varies systematically with the degree of fiscal pressure and that policymakers are less responsive on fiscal issues when fiscal pressure is high. This holds for both left-wing and right-wing governments. In contrast, we do not find strong effects of fiscal pressure on political inequality: responsiveness is not more equal in fiscally more permissive times. However, since different types of policy proposals are adopted in times of high fiscal stress, unequal responsiveness has different policy implications in times of high and low fiscal pressure.